By Dianne Yost senior staff
This week’s announcement that Baxalta International (NYSE: BXLT) is being acquired by Ireland-based Shire PLC (LSE: SHP, NASDAQ: SHPG) for $32 billion will result in no change of plans for Baxalta’s local Georgia operations at Stanton Springs Business Park. An emailed statement to the Morgan County Citizen from the Baxalta Media Team, said: “There is no change in our plans for our Covington Ga., facility. We continue to plan to be commercially operational in 2018.” Baxalta’s Stanton Springs operation is expected to create at least 1,500 jobs by the time it is fully operational in 2018. Madison Morgan County Chamber of Commerce President and Economic Director speculates that the only change we might see is a name change because “Baxalta has made huge investments in infrastructure and training facilities.”
Baxalta, founded in 2015 when it was spun off from parent company Baxter International, operates a large-scale $1 billion bio-manufacturing facility at Stanton Springs as well as a $14 million bio-training facility. As a multi-billion-dollar global biopharmaceutical leader, Baxalta develops, manufactures and commercializes therapies for diseases and underserved conditions in hematology, oncology and immunology. The Stanton Springs Business Park is located in a four-county area governed by the Joint Development Authority (JDA), which includes two representatives from the four counties, including Morgan, Jasper, Newton and Walton. Alan Verner and Andy Ainslie represent Morgan County on the JDA. Hughes believes that Baxter International’s spin off of its biopharmaceutical division (now known as Baxalta), was a strategic plan to position Baxalta for acquisition. Of note, Baxalta was spun off six months ago, at about the same time that Dublin-based Shire began courting the company for a merger.
Shire Chief Executive Officer Flemming Ornskov, M.D., M.P.H., said in a press release: “This proposed combination allows us to realize our vision of building the leading biotechnology company focused on rare diseases. Together, we will have leadership positions in multiple, high-value franchises and become the clear partner of choice in rare diseases. Our expanded portfolio and presence in more than 100 countries will drive our growth to over $20 billion in anticipated revenue by 2020. We look forward to welcoming Baxalta colleagues to a shared entrepreneurial, patient-driven culture.” In an investor relations video address, Dr. Ornskov said, “Our combined robust portfolio includes over 30 recent and planned product launches with an estimated $5 billion in sales potential by 2020. Together, we will offer category leadership with best-in-class products in growing and multi-billion-dollar franchises.” A Wall Street Journal report said the two combined companies would create an organization that is in the same league as Bristol-Myers Squibb Co., based on global prescription sales, according to data from EvaluatePharma, a market intelligence company. Baxtala’s Chief Executive Officer Ludwig Hantson, Ph.D, said in a press release, “We bring to Shire a strong portfolio and pipeline of market-leading products, high quality manufacturing capabilities and a talented global workforce that places patients at the center of everything we do.
The combined organization will be well positioned to accelerate innovation and deliver enhanced value for all stakeholders.” Federal taxes also make the deal attractive as Shire is based in Ireland with a lower tax rate. According to the Wall Street Journal report, 46 percent of Baxalta’s net sales in the first three quarters of 2015 were outside of the U.S. This acquisition would allow future Baxalta earnings outside the U.S. to be brought back to the Irish parent company without a significant tax burden, which the U.S. does not allow.